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Furthermore, a high credit score might enable you to obtain credit with more favorable conditions, such as reduced lending rates, in comparison to individuals with a lower credit score. Your credit score affects more than simply your eligibility. 

Therefore, ignoring your score might end up costing you a lot of money in the long run, especially if you need it to fund your business.

What Is A Credit Score?

A credit score is a three-digit figure that typically ranges from 300 to 850 and indicates how probable you are to pay back loans and make payments on time.

Your credit reports are created using the information obtained by credit-reporting organizations, often known as credit bureaus. The top three credit bureaus in the United States, also known as the big three, are TransUnion, Experian, and Equifax.

Although each creditor has its criteria for acceptable ratings, the following fundamental principles apply: In general, a credit score of 720 or greater is regarded as outstanding. 

The range of 690 to 719 is regarded as good credit. Fair credit is defined as scores between 631 and 689, while bad credit is defined as 629 and lower.

With that said, what are some mistakes you should avoid to get a good credit score to fund your business or any other endeavor?

Having Too Many Unpaid Loans As Well As Credit Card Debt

Your credit rating might suffer if you tend to take on excessive amounts of credit, particularly loans without collateral. A significant quantity of overdue debt suggests a weak capacity to make payments and a strong chance of failure.

Your credit rating and prospects of getting authorized for future credit will often suffer if your monthly average credit repayments exceed 50 percent of your take-home pay or net monthly salary.

So to keep your credit score high and improve your creditworthiness, only borrow as the last option. Don't rack up excessive credit card debt or many unsecured or unprotected loans at once. This way, financial institutions will be able to help you fund your new enterprise.

Additionally, don't apply for credit cards unnecessarily. Now you may be wondering - why does credit card application affect credit score in the first place? 

Well, it’s because when you apply for a credit card, a hard inquiry is generated on your credit report, and it negatively affects it, especially when the credit card company rejects you and you reapply.

So, never reapply for a credit card without knowing why you were rejected the first time, or never apply for a new one without repaying all your credit card debt first.

Not Routinely Reviewing Your Credit Score

Regularly checking your credit rating and credit history for inaccuracies is a smart habit. This is because your report might contain straightforward reporting or clerical mistakes that might negatively affect your credit rating. 

Only if you regularly review your credit history and rating can you have such inaccuracies fixed. Remember that if you examine your personal credit history and report, it is a "soft enquiry" and won't have an impact on your score. 

However, a mistake that sneaks into your credit report undetected might significantly affect your rating and score. In essence, not checking to see if there are errors in your credit report might affect your chances of getting the necessary funding needed for your enterprise.

Maxing Out Your Credit Card Or Cards

A further factor that might lower your credit rating or score is being close to your debt's set capacity. For instance, your credit rating may suffer greatly if you maintain an active credit card and use the whole amount. 

When credit bureaus notice that you are close to your spending threshold, they hesitate to extend you further credit. It might appear as though your finances are deteriorating as you go close to your threshold, and the agencies are just interested in lowering their liability.

Consequently, having this issue, as a result, will reduce the chances of any financial institution taking a chance of lending you for your business.


The only exception is errors, as they can be disputed immediately and removed. However, there are ways to address the other negative entries in your record. In this article, we’re going to show you the steps you should take to remove bad entries from your credit report.

Pull Your Credit Report

The first thing to do is pull your credit report to see if there is anything there. Just because an account has been in collections for a while and you’ve been getting calls and letters, don’t automatically assume that it was reported. If you are past due on an account but it hasn’t been reported to credit reports, you can still prevent the negative reporting by working with the company to pay the bill.

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Companies like Verizon, for instance, will often be open to dealing with you and finding a deal. If you want to know how to do that, Crediful has a few tips on how to handle past due accounts with Verizon and what you can do if it was already reported.

Know that it is not in their interest to send your account to a debt collection agency. Why? Because they aren’t actually collecting the debt on behalf of the company. Your debt is sold to them for pennies on the dollar, and they then accept the responsibility for your debt. Companies like Verizon would much rather strike a deal with you than lose their money. So if it hasn’t been long, chances are you can work out something before you have to deal with a bad entry.

Clean Up the Errors

A surprising number of credit reports have errors on them, and some of these errors do hurt your credit score. This is why you want to address all errors immediately and always make sure that you order your mandatory free copies from all three major bureaus - Experian, Equifax, and Trans Union - once a year.

For example, debts falsely attributed to you that belong to someone else or accounts that should have aged off your account should be removed. Debts might be duplicated or the amount is incorrect. There are several ways to address this.

You can contact the company to remove it, but you'll have to provide evidence that they made a mistake. The benefit of this approach is that their correction should be picked up by all three credit bureaus. The downside is that they have thirty days to remove it, and they may not do so.

You can also dispute the entry with the credit reporting agency itself. This is the best approach if the company doesn’t respond or the error only appears on one credit report. If both of these methods fail, you can take the matter to the Consumer Financial Protection Bureau.

Try to Remove the Correct Negative Entries

Suppose the late payment has been reported to the credit bureaus, and it is a legitimate issue. You shouldn’t dispute that as an error when it isn’t. However, you can ask the company to do a “goodwill adjustment”. After you’ve either paid the debt or entered a payment plan with the creditor, you can ask them to remove the negative entry out of “goodwill”. Note that most creditors will only do this if you have a long history of on-time payments. This means you might get a late house or car payment removed if it was truly a one-time occurrence but not if you’ve had several.

You could also negotiate a pay for delete agreement. This is a request to remove the negative entry on your credit report as a condition of repayment. However, you have to make sure that it is down on paper or else they might not hold up their part of the deal.

Monitor Your Credit Report

Unfortunately, credit reporting is an ongoing process. This means you need to constantly monitor your credit for future errors and mistakes after verifying that the entry you requested removed is gone. You may have to try another tactic if the negative entries aren’t removed or even reappear.


Negative entries on your credit report take up to seven years to disappear. However, there are tactics you can use to remove the negative entries, especially if you’ve corrected the situation.

Many people are resorting to investments because they started to realize that living paycheck to paycheck just won’t cut it anymore. The problem with deciding to take that step is the fact that you’re going to need some money in the beginning, which isn’t always easy. Your best choice is usually trying to get a loan, but a few complications come with that option. Whether you’re trying to get a loan to start a business or to pay off your mortgage, bad credit history will always stand in your way. The question is, can you still get a loan in that case?

Can you get a loan with a bad credit history?

It’s possible, yes, though it’s definitely not easy. Having bad credit history doesn’t mean you’re a bad person. It’s a financial strait that many people find themselves in and it’s a tough jam to get out of. You need a loan to get out of that closed loop, and there are sources from which you can get one, even if you have bad credit history.

Friends or family

Yes, your first approach to getting a loan with your bad history is going to friends and family. It doesn’t always work, but if it does, you should definitely take advantage of this window because chances are your friends and family won’t charge you high interest rates, if they even did. You need to come up with a sound payment plan that ensures that they will get their money back in a period of time on which you’ll both agree. It’s very important that you make them trust that you’ll pay all the money back in a specific period of time, so they’d feel comfortable lending you the money you need to get out of your financial strait.


Now that the easy option is out of the way, is it possible to get a bank loan or one from a lender with your bad history? It isn’t easy, but it’s definitely possible. You’re going to have to do some things, though, to qualify for a loan. These are some tips and things you need to keep in mind because they might just get you that loan you desperately need.

1.    Get acquainted with your finances

You can’t possibly hope to get a loan unless you know the ins and outs of your personal finances, down to the tiniest details. Get acquainted with your accounts, what’s in them and how the cash flow has been moving over the past few years. You can start doing that by checking your credit reports, which is a crucial first step because that’s how you start figuring out your credit score. If there are any special comments in your report, you should try reaching out to whoever put that remark to have them remove it before you apply for a loan –– because it does make a difference and comments like these will be taken into consideration by the lender.

It’s also very important that you learn your credit scores as well as your debt to income ratio, because that is how you can start figuring out a plan to improve your score history to get back on your feet successfully.

2.    How you can improve your credit history

Now that you’re well acquainted with your credit history, it’s now time to start applying certain strategies to improve it. The first thing you have to pay attention to is the payment history. Yes, a lot of factors are taken into consideration in your overall score, but payment history is the most crucial and delicate one. So, you must make sure you pay the upcoming payments on time. Forget about what happened in the past, and focus on the future ones to ensure you never miss one.

Contrary to popular belief, closing old accounts is not always a good practice. Why? Because those old accounts that you’ve already paid off open can help increase your credit history length, and it could give you a lot more solid grounds to stand on when you’re applying for the new loan.

One thing you have to be careful about is your credit limit. It is always best that you keep the ratio between your debt and your credit limit reasonable. The less that ratio is, the better, naturally. This is important because it’s a very bad sign if that percentage is high, and it would show many lenders that you’re not very wise when it comes to your finances and it might sway them from giving you a loan.

Speaking of credit, you should never open new credit accounts unless you’re 100% certain you could take care of them and pay them off on time. Randomly and excessively opening credit accounts shows lenders that you’re not very responsible, or worse, it might make them think that you’re running a scam. This is why it’s very important that you keep this to a minimum, and only open new accounts in the case of emergencies, and if you’re absolutely sure you could handle them.


3.    Understand your options

After doing your best to improve your credit score, you next want to start looking for a suitable lender that can give you what you’re looking for. But there’s one more thing you need to do before taking that step, and that is understanding your options when it comes to loans. The two most common types are unsecured and secured loans.

Unsecured loans might be a bit problematic if you have a bad history, because they basically charge you a higher interest rate because of your situation –– and that is if you managed to obtain the loan in the first place. An unsecured loan is basically one that you don’t need collateral for. You can use them to cover emergencies or take care of another debt you found yourself in.

Secured loans, on the other hand, are protected by a collateral like home equity or any other assets. The good thing about this is the fact that they come with lower interest rates, but you do need to have a collateral to get a secured loan in the first place.

4.    Find a co-signer

This is one of the best strategies that could help you land a loan. A co-signer is someone with a healthy credit score who would sign the loan with you, which will make your chances of getting it exponentially better, not to mention the fact that it’ll also probably land you a lower interest rate as well. Your chances are always better with a co-signer, and if you have someone willing to help you with that you should definitely get them to do it because it’ll make a lot of difference.

5.    Find the right lender

Now that everything’s in order, you need to start looking for the right lender. This step will require a lot of research on your end, and it’s important that you be diligent with it because it makes all the difference in how this entire process will pan out. Don’t just go for the first loan that approves you; wait until you look at other options so you could have a clear picture.

You want to find a lender that would give you the personal loan you need for the lowest interest rate possible, and the best loan term. Each will have their own policies and evaluation process to determine just how much risk comes to lending you money, because loans for those with bad credit are associated with a risk factor for most lenders and they don’t hand them out like that. You need to keep all those points in mind because you might need the money urgently, for instance. So, do your homework and research the hell out of every possible lender you can find online, and you are going to find plenty.

Other options

There are other options that you can resort to if you want to get a loan with your bad history, but they might come with higher interest rates in some cases. For instance, in title loans, lenders rarely care about your bad credit, and you could easily use your vehicle as collateral to get some money, but it’s a short term loan and the interest rates are usually a bit higher. So, keep that in mind if you’re considering getting a title loan. Another good option for is credit unions, which particularly specialize in offering loans to people who have a bad credit history, and you can easily find local options to help you get out of your jam. The great thing about credit unions is the fact that they have an interest ceiling which applies to everyone –– 18%. That is a great percentage and it’s around half of what a bank would offer you for a similar loan with your bad history.

There are other options that you can resort to if you want to get a loan with your bad history, but they might come with higher interest rates in some cases.

What the cons of loans with bad credit are

1.    Higher interest rate

You can get a loan even with your bad history, but you’re going to have to pay higher interest rates than usual because of your special situation. Banks and lenders usually take advantage of your need for money –– and to be honest, they’re trying to be on the safe side, considering your bad history and the fact that you’re at risk –– so they impose higher interest rates, which means you’ll pay a lot of money in the long run. You need to keep that in mind before applying for a loan with bad history so you don’t get surprised when it does get approved.

2.    They take time

Some of these loans with bad history could take quite some time to get processed, a bit longer than your average loan. Sometimes it’s because they’re double checking your history and thoroughly going through your finances or any other details, but it might not be the best option for you in case of emergencies.

3.    Penalties

You have to make sure you’ve read every detail of your agreement with the lender, because sometimes there are extra fees or penalties that you might be subject to without even knowing it. Ask if there is a loan origination fee or any other hidden fees, and whether or not they have penalties for being late and just how much those penalties are. There are even some lenders that impose a penalty if your payments are made by check! So, it’s important to carefully check those details because the last thing you want in your situation is to pay any extra money that you can’t afford to spare.

4.    The risk involved

You might get asked to include a collateral in the agreement like your car or house, which is a bit risky because if you failed to pay your installments, you might lose the car or the house.

5.    Plenty of shady lenders

You might come across quite a few shady lenders here and there, which is something you need to be really careful about. Some are not licensed and don’t have approval to offer that kind of service, so make sure that you’re dealing with a licensed lender in your state before you pay any money so you don’t end up being scammed.

6.    The temptation of short-term loans

Most short-term loans with your bad history can be too much to resist sometimes. Title loans, paydays, and all the likes might seem very tempting, but they come with a lot of baggage. Their interest rates are higher and they cost you more money in the long run, so that’s definitely something you should keep in mind.

As shown in this article, it is possible to get a loan with bad history. Is it perfect? Definitely not, but neither is your situation. You’ll have to compromise either way to get out of the mess you’re in, but remember to be patient and wait until you get several other offers so you could compare between them and choose the most suitable one for you.

If possible, you may be better off minimizing the amount that you borrow until your credit score shows signs of improvement. Unfortunately, this is not always an option for people who find themselves in times of unexpected financial strain, and absolutely need a loan.

This is where direct lender installment loans for bad credit come into play. With these types of loans, a lender may be more likely to approve your loan given your credit score, but they may come with higher interest rates or fees.

Here are some other types of loans that may provide assistance if you find yourself in an unexpected financial crisis and have bad credit.

1. VA Home Loan

A VA home loan is a program designed to help veterans become homeowners. Although the VA does not supply the loan, they act as a co-signer for the veteran. This enables the veteran to obtain a guaranteed amount and interest rate regardless of having bad credit.

2. Secured Personal Loans

Having a secured personal loan means you have collateral that equals the amount that you borrow and that the lender can seize if a default should occur by you. Examples of personal loans include auto loan and mortgages.

In some instances, you may obtain a secured personal loan through a bank, online lenders, or credit unions, where the borrower borrows against a personal asset such as savings or an automobile. These loan types tend to carry lower interest rates compared to unsecured loans due to the lower risk involved.

3. Fixed-Rate Loans

Having a fixed-rate loan when you have bad credit may require you to make a down payment to secure the amount of your loan and rate. Having a fixed-rate loan is perfect for having monthly payments made that are consistent. This loan type also allows you to budget better thus helping you to change your spending habits and improving your bad credit.

4. Variable-Rate Loans

A variable-rate loan carries an interest rate that is tied to a bank rate called benchmark. As a benchmark rate fluctuates, your loan rate, total interest, and payment amount also fluctuates.

A benefit of a variable-rate loan includes an APR that is usually lower than what a fixed-rate loan has. Another benefit includes a possible cap on the rate and the number of times it can change over a certain amount of time as well as the amount of time of the loan.

It can make sense to have a variable-rate loan if your term is short-term because the rates could become higher, but may stay the same if the loan is short-term.


5. Debt Consolidation Loans

A debt consolidation loan gathers all of your debts into one combined loan. This type of loan usually has an APR that is lower so that you are able to save money because of the interest. When you consolidate you simplify all of your debts payments by creating only one payment per month.

6. Co-Sign Loans

A co-sign loan specifically targets borrowers with bad or no credit history who would not be approved if they applied alone. When a co-signer is used they act as a promise that the loan will be paid in accordance with the terms and amount if the borrower is unable to.

When a co-signer is used and their credit is strong then your chances for qualifying improve thus allowing you to secure loan terms that are favorable and a rate that is lower.

7. Personal Line of Credit

When you obtain a line of credit you have revolving credit which acts like a credit card. So instead of getting a cash loan, you have a credit amount that you borrow from whenever the need arises. You then make payments only on the amount that is borrowed.

This loan type works best for when you have times of emergency or for expenses that are ongoing, instead of an expense that is one-time.

8. Payday Loans

Another type of unsecured loan is a payday loan, which is normally repaid on a borrower’s payday. Payday loans are designed for convenient repayment because in some instances, they can be repaid by simply having a borrower’s predated check deposited. The loan amounts can be low and average around a couple of hundred dollars.

Unfortunately, a poor credit score can make renting in Edinburgh or other areas difficult. You can’t borrow your favorite property with bad credit.

The average Fico score varies between 300 and 850. A fair credit score is between 580 to 669, however even a score of 675 may not help you to get the best rates on traditional mortgages.

There is no need to worry because you can in fact qualify for a mortgage with a weak or average credit score. Some government programs offer VA and FHA loans. Furthermore, each state has special lenders providing home loans for poor credit.

Here are some tips to get a mortgage with a bad credit score

Repair Bad Credit

Fortunately, you can work on your credit score over time. Before researching a house, you have to check your credit reports. In order to repair bad credit, you have to pay your utility bills before their due date and make sure to repay your loans as soon as possible.

Try to increase your credit score to almost 660. It will help you to drop a significant percentage of mortgage interest. Take necessary actions: pay your bills, decrease your balance, and avoid taking more credit. Before applying for a mortgage, you should examine credit reports further to find any discrepancies. Make sure you fix these as soon as possible.

Avoid Late Payments

In numerous cases, your poor payment habits can affect your bill payment. Remember, your payment history can affect your score. Try to improve on your bad habit of making late payments. By making timely payments, you will quickly improve your credit score.

Decrease Credit Utilization

Your debt will make up almost 30% of your FICO score. If you owe less than your capacity, you can improve your score. It is known as the rate of total credit utilization. Experts suggest managing your utilization on all cards under 30 percent. This figure is essential for credit reporting agencies.

Try to pay off your balance as soon as possible to improve your credit card statement. If you are unable to pay the whole balance before the closing date of the credit statement, try to decrease this amount as per your capacity.

If you are planning for a mortgage, avoid new credit because it will affect your credit score, but the right credit mix could help you raise your credit score to an optimal figure.

In this article, we provide some tips that could help improve your credit score, allowing you to easily qualify for a car loan or personal loan. So, without wasting any time, let's look at some tips on how you can improve your credit score.

Rectify the mistakes from your credit report

There is no doubt that sometimes incorrect information does severe damage to your credit score. So, you must carefully check your credit report to see if there are any mistakes in it. We recommend checking the report at least once a year because your credit score is profoundly affected by the information found on your credit report. Make sure that you get these problems resolved promptly; otherwise your credit score will be severely affected by these errors.

You may consult your national credit bureau, like the Credit Bureau Singapore (CBS), if you want to report the accuracy of any item of information like overdue balances, previous inquiries, and account status. The credit bureau will highlight in your report that the following information is under investigation.

Pay bills on time

A missed credit card bill payment is a dangerous element that damages your credit score in the long run. It will take a lot of time to improve your credit score if there are any missed payments in your report. Banks and other financial institutions will evaluate the risk by carefully analyzing your credit card payments. So, if you want to maintain a high credit rating, you must pay your credit card balances in full every month.

Multiple New Credit Applications Are Also A Threat

The eligibility criteria and requirements are different for every bank. Therefore, we cannot state a particular number of new applications that may harm your credit score. However, your credit score will be severely affected if you've applied for many new credit facilities in a very short period.

Keep Your Credit Active

The lender will also check if you're a responsible user of credit or not. So, if you're not utilizing your credit cards after paying off all your credit card bills, it may have an adverse impact on your credit rating. You must regularly build a history of on-time repayments by using your credit cards after a specific period. The regular use of credit has a significant impact on your reputation.

Keep it Simple

Managing credit is not a problem at all. All you need to do is to keep things simple and smooth. Here are a few habits you must follow in the long run if you want to maintain a good credit score:

Building your credit health is entirely in your control. So, consistency is key. With the tips below you’ll have no problem pushing your score right back up.

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